Hi bobby,
Heck, I'll give YOU two breaks. :o)
Yes, the official numbers are probably cooked. Still, up until very recently, the average house cost more, the average car cost more, the average education cost more, and the average hospital stay cost more. And when was the last time you saw a decrease in an insurance premium of any type? On the other hand, tech prices keep falling (your scanner), and oil in dollar terms is now cheaper than bottled water. So, the net effect in the USA is generally falling prices, yet with positive inflation, i.e., disinflation.
The real trouble begins when an economy crosses the line into pure deflation. At that point, it starts making sense for consumers to suspend all discretionary purchases as prices, in real terms, are lower the longer one waits. This collapses earnings, produces job losses, and reduces tax revenues. The first wave can then produces a second wave down, and the second wave down a third, etc.
So I'm not quite sure what your issue is, as I agree -- prices ARE falling, not rising -- we just haven't yet crossed the line into deflation, at least not "officially". |
